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Obligations and Contracts Arts. 1158-1169
Obligations and Contracts Arts. 1158-1169
Obligations and Contracts Arts. 1158-1169
CHAPTER 1
GENERAL PROVISIONS
JURIDICAL NECESSITY – juridical tie; connotes that in case of noncompliance, there will be legal
sanctions.
An obligation is nothing more than the duty of a person (obligor) to satisfy a specific demandable
claim of another person (obligee) which, if breached, is enforceable in court.
A contract necessarily gives rise to an obligation but an obligation does not always need to have a
contract.
KINDS OF OBLIGATION
A. From the viewpoint of “sanction” -
(a) CIVIL OBLIGATION – that defined in Article 1156; an obligation, if not fulfilled when it
becomes due and demandable, may be enforced in court through action; based on law; the
sanction is judicial due process
(b) NATURAL OBLIGATION – defined in Article 1423; a special kind of obligation which cannot
be enforced in court but which authorizes the retention of the voluntary payment or
performance made by the debtor; based on equity and natural law. (i.e. when there is
prescription of duty to pay, still, the obligor paid his dues to the obligee – the obligor cannot
recover his payment even there is prescription) the sanction is the law, but only conscience
had originally motivated the payment.
(c) MORAL OBLIGATION – the sanction is conscience or morality, or the law of the church.
(Note: If a Catholic promises to hear mass for 10 consecutive Sundays in order to receive
P1,000, this obligation becomes a civil one.)
B. From the viewpoint of subject matter -
(a) REAL OBLIGATION – the obligation to give
(b) PERSONAL OBLIGATION – the obligation to do or not to do (e.g. the duty to paint a house,
or to refrain from committing a nuisance)
C. From the affirmativeness and negativeness of the obligation -
(a) POSITIVE OR AFFIRMATIVE OBLIGATION – the obligation to give or to do
(b) NEGATIVE OBLIGATION – the obligation not to do (which naturally inludes not to give)
D. From the viewpoint of persons obliged - “sanction” -
(a) UNILATERAL – where only one of the parties is bound (e.g. Plato owes Socrates P1,000.
Plato must pay Socrates.)
(b) BILATERAL – where both parties are bound (e.g. In a contract of sale, the buyer is obliged
to deliver)
- may be:
(b.1) reciprocal
(b.2) non-reciprocal – where performance by one is non-dependent upon performance by the
other
ELEMENTS OF OBLIGATION
a) ACTIVE SUBJECT – (Creditor / Obligee) the person who is demanding the performance of the
obligation;
b) PASSIVE SUBJECT – (Debtor / Obligor) the one bound to perform the prestation or to fulfill the
obligation or duty;
c) PRESTATION – (to give, to do, or not to do) object; subject matter of the obligation; conduct
required to be observed by the debtor;
d) EFFICIENT CAUSE – the JURIDICAL TIE which binds the parties to the obligation; source of the
obligation.
PRESTATION (Object)
1. TO GIVE – delivery of a thing to the creditor (in sale, deposit, pledge, donation);
2. TO DO – covers all kinds of works or services (contract for professional services);
3. NOT TO DO – consists of refraining from doing some acts (in following rules and regulations).
1157. Obligation arises from – (1) law; (2) contracts; (3) quasi-contracts; (4) acts or omissions
punished by law; (5) quasi-delicts.
(1) LAW (Obligation ex lege) – imposed by law itself; must be expressly or impliedly set forth and
cannot be presumed
- [See Article 1158]
(2) CONTRACTS (Obligation ex contractu) – arise from stipulations of the parties: meeting of the minds /
formal agreement
- must be complied with in good faith because it is the “law” between parties; neither party may
unilaterally evade his obligation in the contract, unless:
a) contract authorizes it
b) other party assents
Note:
Parties may freely enter into any stipulations, provided they are not contrary to law, morals, good
customs, public order or public policy
- [See Article 1159]
(3) QUASI-CONTRACTS (Obligation ex quasi-contractu) – arise from lawful, voluntary and unilateral
acts and which are enforceable to the end that no one shall be unjustly enriched or benefited at the
expense of another
- 2 kinds:
a. Negotiorum gestio - unauthorized management; This takes place when a person voluntarily
takes charge of another’s abandoned business or property without the owner’s authority
b. Solutio indebiti - undue payment; This takes place when something is received when there is
no right to demand it, and it was unduly delivered thru mistake
- [See Article 1160]
(4) DELICTS (Obligation ex maleficio or ex delicto) – arise from civil liability which is the consequence of
a criminal offense
- Governing rules:
1. Pertinent provisions of the RPC and other penal laws subject to Art 2177 Civil Code
[Art 100, RPC – Every person criminally liable for a felony is also civilly liable]
2. Chapter 2, Preliminary title, on Human Relations ( Civil Code )
3. Title 18 of Book IV of the Civil Code – on damages
- [See Article 1161]
Unless such obligations are EXPRESSLY provided by law, they are not demandable and enforceable,
and cannot be presumed to exist.
The Civil Code can be applicable suppletorily to obligations arising from laws other than the Civil
Code itself.
Special laws – refer to all other laws not contained in the Civil Code.
1159. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith.
CONTRACT – meeting of minds between two persons whereby one binds himself, with respect to the
other, to give, to do something or to render some service; governed primarily by the agreement of the
contracting parties.
VALID CONTRACT – it should not be against the law, contrary to morals, good customs, public order,
and public policy.
In the eyes of law, a void contract does not exist and no obligation will arise from it.
OBLIGATIONS ARISING FROM CONTRACTS – primarily governed by the stipulations, clauses, terms
and conditions of their agreements.
FALSIFICATION OF A VALID CONTRACT – only the unauthorized insertions will be disregarded; the
original terms and stipulations should be considered valid and subsisting for the partied to fulfill.
1160. Obligations derived from quasi-contracts shall be subject to the provisions of chapter 1,
title 17 of this book.
QUASI-CONTRACT – juridical relation resulting from lawful, voluntary and unilateral acts by virtue of
which, both parties become bound to each other, to the end that no one will be unjustly enriched or
benefited at the expense of the other. (See Article 2142)
(1) NEGOTIORUM GESTIO – juridical relation which takes place when somebody voluntarily
manages the property affairs of another without the knowledge or consent of the latter;
owner shall reimburse the gestor for necessary and useful expenses incurred by the latter
for the performance of his function as gestor.
(2) SOLUTIO INDEBITI – something is received when there is no right to demand it and it
was unduly delivered through mistake; obligation to return the thing arises on the part of
the recipient. (e.g. If I let a storekeeper change my P500 bill and by error he gives me
P560, I have the duty to return the extra P60)
1161. Civil obligations arising from criminal offenses shall be governed by the penal laws,
subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2,
Preliminary in Human Relations, and of Title 18 of this book, regulating damages.
Governing rules:
1. Pertinent provisions of the RPC and other penal laws subject to Art 2177 Civil Code
[Art 100, RPC – Every person criminally liable for a felony is also civilly liable]
2. Chapter 2, Preliminary title, on Human Relations ( Civil Code )
3. Title 18 of Book IV of the Civil Code – on damages
Every person criminally liable for a felony is also criminally liable (art. 100, RPC)
1162. Obligations derived from quasi-delicts shall be governed by the provisions of chapter 2,
title 17 of this book, and by special laws.
QUASI-DELICT (culpa aquiliana) – an act or omission by a person which causes damage to another
giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no
pre-existing contractual relation between parties. (See Article 2176)
REQUISITES:
a. omission
b. negligence
c. damage caused to the plaintiff
d. direct relation of omission, being the cause, and the damage, being the effect
e. no pre-existing contractual relations between parties
Fault or Negligence – consists in the omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the person, time, and of the place.
1163. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires
another standard of care.
Speaks of an obligation to care of a DETERMINATE thing (that is one which is specific; a thing
identified by its individuality) which an obligor is supposed to deliver to another.
Reason: the obligor cannot take care of the whole class/genus
DUTIES OF DEBTOR:
** Debtor is not liable if his failure to deliver the thing is due to fortuitous events or force majeure…
without negligence or fault in his part.
1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it
arises. However, he shall acquire no real right over it until the same has been delivered to him.
REAL RIGHT (jus in re) – right pertaining to person over a specific thing, without a passive subject
individually determined against whom such right may be personally enforced.
a right enforceable against the whole world
PERSONAL RIGHT (jus ad rem) – a right pertaining to a person to demand from another, as a definite
passive subject, the fulfillment of a prestation to give, to do or not to do.
Before the delivery, the creditor, in obligations to give, has merely a personal right against the
debtor – a right to ask for delivery of the thing and the fruits thereof.
Once the thing and the fruits are delivered, then he acquires a real right over them.
Ownership is transferred by delivery which could be either actual or constructive. (Art. 1477)
The remedy of the buyer when there is no delivery despite demand is to file a complaint for
“SPECIFIC PERFORMANCE AND DELIVERY” because he is not yet the owner of the property before
the delivery.
ACTUAL DELIVERY – actual delivery of a thing from the hand of the grantor to the hand of the grantee
(personally), or manifested by certain possessory acts executed by the grantee with the consent of the
grantor (realty).
FRUITS:
1. NATURAL – spontaneous products of the soil, the young and other products of animals;
2. INDUSTRIAL – produced by lands of any cultivation or labor;
3. CIVIL – those derived by virtue of juridical relation.
** SEE Article 1164 (retroactivity of the effects of conditional obligation to give once the condition has
been fulfilled)
1165. When what is to be delivered is a determinate thing, the creditor … may compel the
debtor to make delivery. If the thing is indeterminate or generic, he may ask that the obligation
be complied with at the expense of the debtor. If the obligor delays or has promised to deliver
the same thing to two or more persons who do not have the same interest, he shall be
responsible for any fortuitous event until he has effected the delivery.
DETERMINATE THING
something which is susceptible of particular designation or specification;
obligation is extinguished if the thing is lost due to fortuitous events.
Article 1460: a thing is determinate when it is particularly designated and physically segregated
from all others of the same class.
INDETERMINATE THING
something that has reference only to a class or genus;
obligation to deliver is not so extinguished by fortuitous events.
As a general rule, “no person shall be responsible for those events which could not be foreseen, or
which, though foreseen, are inevitable, except:
1. in cases expressly specified by the law
2. when it is stipulated by the parties
3. when the nature of the obligation requires assumption of risk
An indeterminate thing cannot be object of destruction by a fortuitous event because genus never
perishes.
1166. The obligation to give a determinate thing includes that of delivering all its accessions
and accessories, even though they may not have been mentioned.
ACCESSORIES – things included with the principal for the latter’s embellishment, better use, or
completion
When does right to fruits arise? – from the time the obligation to deliver arises
Conditional – from the moment the condition happens
With a term/period – upon the expiration of the term/period
Simple – from the perfection of the contract
1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation …
it may be decreed that what has been poorly done be undone.
1168. When the obligation consists in NOT DOING and the obligor does what has been
forbidden him, it shall also be undone at his expense.
1169. Those obliged to deliver or to do something incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exists:
KINDS OF DEFAULT:
a) MORA SOLVENDI – delay on the part of the debtor to fulfill his obligation;
REQUISITES:
1. failure of the obligor to perform obligation on the DATE agreed upon;
2. demand (judicial/extrajudicial) by the creditor;
3. failure to comply with such demand
EFFECTS:
1) debtor – liable for damages and interests
2) debtor – liable for the loss of a thing due to a fortuitous event
KINDS:
1) mora solvendi ex re – default in real obligations (to give)
2) mora solvendi ex persona – default in personal obligations (to do)
b) MORA ACCIPIENDI – delay on the part of the creditor to accept the performance of
the obligation;
Effects:
1. creditor – liable for damages
2. creditor – bears the risk of loss of the thing
3. debtor – not liable for interest from the time of creditor’s delay
4. debtor – release himself from the obligation
Default / Delay in negative obligation is not possible. (In negative obligation, only fulfillment and
violation are possible)